Proxy advisory firm Glass Lewis had recommended shareholders vote for Unilever’s (LON:ULVR) proposed plan to scrap its London headquarters, Reuters has revealed. The Anglo-Dutch consumer goods group, however, abandoned the proposal last week following massive opposition from UK shareholders.
Unilever’s share price has fallen deep into the red in London in today’s trading, having given up 1.73 percent to 3,966.00p as of 14:46 BST. The drop is largely in line with the broader market selloff which has seen the benchmark FTSE 100 index give up 1.40 percent to 7,045.58 points so far today.
Glass Lewis endorsed Dutch move
Reuters reported this week that US-based Glass Lewis, influential with US institutional investors, had recommended that Unilever’s shareholders vote for the group’s proposed move to the Netherlands. The Anglo-Dutch group, however, pulled the plug on the proposal last Friday before the proxy advisory firm distributed its report.
In endorsing Unilever’s move, Glass Lewis had taken a different path from rival firm PIRC, arguing that long-term benefits of simplifying the company’s structure outweighed the near-term consequences, with the Anglo-Dutch group set to leave the FTSE 100 index.
“We do not consider index rebalancing to be inherently uncommon or onerous,” Reuters quoted Glass Lewis as saying in its report from last week, which was made public on Tuesday. “Nor do we believe scuttling the simplification by virtue of this issue […] represents a suitably long-term perspective.”
Analysts on consumer goods group
UBS reaffirmed Unilever as a ‘buy’ today, while trimming its price target on the shares from 4,700p to 4,500p today, while earlier this week, Goldman Sachs, which sees the company as a ‘neutral,’ set a price target of 3.950p. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average price target of 4,426.56p.